Singapore Property News This Week #251

Residential

Condo resale prices fall by 0.3% in Feb

In February this year, resale prices of private condos have fallen by 0.3% following a 0.8% increase in January. Year-on-year, prices had fallen 1.6% from February 2015 and 7.4% since January 2014. In February 2016, there was no change in transaction prices in the Core Central Region, however there was a 0.1% increase in prices in the Rest of Central Region. According to market experts, the price increase recorded in January was an anomaly. Eugene Lim from ERA Realty blamed monthly fluctuations, aggravated by reduced market activity. Ong Kah Seng from R’ST Research added that as the total debt servicing ratio has not been lifted, the general trend for completed property prices is still expected to fall. Resale volumes for condos had also fallen by 10.8% month-on-month this February even though no new project was launched. About 356 units changed hands compared to 399 units in January. Year-on-year, the resale volume had increased 3.8% compared to 343 units in February 2015. As more buyers purchase for their own occupation, resale units are more appealing due to their larger home sizes and due to the higher bargaining power of the buyers, said Lim. Thus, he expects to see increase in transaction volumes in the resale market this year from March to July before the onset of the hungry ghost month, which is a traditionally slow sales period.

(Source: Business Times)

HDB rents more resilient than non-landed private home rents

Rentals of both condos and HDB flats had fallen in February this year. SRX Property’s latest flash estimates showed that HDB flat rents had fallen by just 3.7% while the rental index for non-landed private homes had fallen by 5%. Market experts said that this suggested that HDB flat rents are more resilient than non-landed private home rents on a longer-term basis. Since their peak in January 2013, non-landed private home rents have fallen by 15.2%. On the other hand, HDB rents had fallen by 9.1% from their high in August 2013. ERA Realty’s Eugene Lim said that HDB flats enjoy a stronger base of rental demand from the more budget-conscious tenants, such as foreign professionals who come to Singapore with their families. Overall, non-landed private home rental index had fallen by 0.7% month-on-month this February, following a 0.2% month-on-month increase in January this year. Year-on-year, non-landed private home rentals in the Core Central Region had increased 0.22% while those in the Rest of Central Region had fallen by 8.4% and those in the Outside Central Region had also fallen by 6.9%. On the other hand, the overall rental index for HDB flats had fallen by 0.9% month-on-month in February, and four-room HDB flat rental index had gone down by 2.6% year-on-year. Three-room HDB flat rents had fallen by 3.6% year-on-year while five-room and executive flat rents saw a 5.8% fall year-on-year.

(Source: Business Times)

JLL: Singapore prime homes more “affordable” now

According to JLL, buying a prime residential property in Singapore now is more “affordable” than in other global cities, in spite of loan curbs and tax burdens. The average luxury prime home is estimated to be priced around $1,991 psf in Q4 2015 in Singapore. This is about 20% less than in 2011. Office, retail and industrial property prices have fallen by 4 to 6% while suburban residential prices had gone down by 12%, thus making the fall in luxury homes prices the largest across domestic asset classes in the last 4 years. While the prices of luxury homes in Singapore have been falling, market experts said that other cities’ prices have continued to climb in the last 4 years. Prime home prices in Hong Kong are now 165% higher than in Singapore. In New York and London, prime home prices are about 10 to 30% higher than Singapore in 2010, but are 80 to 90% higher in 2015 because prices had rose by 20 to 25% in New York and London while prices in Singapore had fallen by 20%. Regina Lim from JLL said that despite the increase in buying and selling stamp duties, the cost of property ownership in Singapore of 19% is comparable to that of other global cities which range from 14 to 26%. Lim added that she believes developers could seek to sell around 1,000 prime residential units in 2016 to 2018 if the market does not improve.

(Source: Business Times)

Market experts recommend reviewing cooling measures

PropNex Realty had proposed a tiered approach to tweaking the additional buyer’s stamp duty (ABSD) in its recommendations on how property cooling measures can be adjusted. Chief among its proposal is for the ABSD to be lifted for Singaporeans buying second homes and to pare down the ABSD on their third purchases to 5% from the current 10%. This proposal came amid increasing calls for the government to review current cooling measures. Not only so, PropNex proposed for the ABSD of 15% to be maintained for foreigners buying homes of $3 million or less but for it to be reduced to 5% on first-time purchases and 10% for second-time purchases for foreigners buying homes of over $3 million. PropNex said that this tiered approach will protect Singaporeans looking to buy a home from foreign competition. For ECs, PropNex had recommended to increase the mortgage servicing ratio from 30% to 45% since the quantums for ECs are higher than new HDB flats. Minister for Social and Family Development Tan Chuan-Jin said that other factors such as interest rates and the macro-economic condition need to be considered before any adjustments are made to current measures.

(Source: Business Times)

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